Wondering what to expect from the real estate market in 2026? You are not the only one. For the past few years, affordability has been the biggest barrier standing between most people and their next step. And many buyers and sellers have been holding their breath waiting for things to improve. The good news? It’s finally happening.
In 2025, affordability was the best in 3 years. And experts agree that momentum will continue into 2026. And that’s based on their analysis of the key factors that will shape the housing market in the coming year: mortgage rates, inventories and home prices.
The lowest mortgage rates are here
Mortgage rates have already dropped from their peak. By some estimates, they fell almost a percentage point over the past year. And that is something important, although it may not seem like it. But how far will they go? And should you wait for them to drop further? Here is your answer.
Forecasts suggest that they will remain practically where they are now and float in the under 6% range throughout 2026 (see chart below):
Where they go from here really depends on what happens with the economy, the labor market, and any monetary policy changes the Federal Reserve makes in the coming year. The important thing is that they are already lower than just a year ago and that is ideal if you are planning a move for 2026.
- For buyers: A lower rate reduces monthly payments and increases purchasing power. And that combination helps more people qualify for housing that once seemed out of reach.
- For sellers: It may be time to accept that rates on the 6 are the new normal. And if you need to move, it’s doable, especially with your capital.
Even more options are on the way
In 2025, the number of homes for sale improved by about 15%. As inventories rose, buyers got back things they hadn’t had in years: options, time to consider those options, and negotiating leverage. That helped restore greater balance to the housing market.
Not to mention, inventory gains are a big part of what helped slow price growth, which in turn improves affordability.
While inventory gains this year are not expected to be as pronounced, experts at real estate agent.com say The supply of homes for sale should grow another 8.9% this year.
- For buyers: That means even more options and more negotiating power.
- For sellers: Pricing your home correctly will be essential to attracting buyers.
House price growth is slowing at a more sustainable pace
With more homes for sale, there isn’t as much upward pressure on prices right now. And we’ve seen that shake out over the past year. Even so, the vast majority of experts Let’s say that, nationally, prices will continue to rise over the next year, just at a slower pace. On average, they say prices will rise 1.6% in 2026 (see chart below):
And that’s reassuring if you’ve been receiving content on social media saying prices are going to crash. But this is what you need to remember most about this. It will vary a lot depending on the area.
So, lean on a local agent to get the latest on what’s happening where you are. In some markets prices will increase more than this. Others may see prices drop slightly. It really all depends on your local market conditions.
But overall, prices will continue to rise nationwide. And that’s good for the market as a whole. As real estate agent.com explains:
“For home buyers and sellers, the change signals a more balanced market—One in which price growth stabilizes, rate relief offers respite, and bargaining power subtly shifts toward buyers.”
- For buyers: Expect more moderate price growth, not the sudden, intense spikes of just a few years ago. This gives you fewer surprises and more predictability, making budgeting much easier.
- For sellers: This slower price growth restores equilibrium without jeopardizing its equity at risk. And that is a victory.
More houses will be sold
This all adds up to a better affordability equation in 2026. And that’s exactly why experts say we should see more homes selling (and more people buying) this year.
As Mischa Fisher, chief economist at Zillowsays:
“Buyers are benefiting from increased inventory and greater affordability, while sellers are seeing price stability and more consistent demand. Each group should have a little more room for maneuver in 2026.”
The bottom line is that more people will finally be able to move this year. So the question is: will you be one of them? The market is giving you an opportunity that you haven’t had in a long time. Maybe it’s time to take advantage of it.
Affordability won’t suddenly change overnight. But, with several key trends working together, it should improve slowly and steadily in the coming months.
That’s exactly why, in 2026, we should see a market with more balance, more predictability, and more breathing room than we’ve had in years.
